Westwood, Amway Settle Suit Over Mutual Network

Westwood One, which acquired the Mutual Broadcasting System last December, said Tuesday that it has settled its suit against Amway, the system’s former owner.

Terms of the settlement were not made public, but Gary Yusko, Westwood’s financial vice president, said they will be disclosed in a filing with the Securities and Exchange Commission.

Westwood, based in Culver City, purchased the Mutual Broadcasting System, the nation’s largest radio network, from Amway for stock and $30 million in cash and notes. Amway, headquartered in Ada, Mich., is a diversified, privately held company best known for its door-to-door sale of soap and other household products.

In the March 4 lawsuit filed in Los Angeles Superior Court, Westwood said Amway operated two other radio networks after the sale of Mutual to Westwood, allegedly in violation of an agreement not to compete with Westwood.

Westwood One sells advertising for radio programs that it buys or produces. It then sells the shows and advertising as a package to more than 2,000 radio stations nationally. In the suit, Westwood said Amway confused Westwood customers by identifying itself as the former owner of the Mutual Broadcasting System.

Westwood said at least eight radio shows were distributed by Amway’s other two networks, including “The Deukmejian Show,” a weekly five-minute talk by California Gov. George Deukmejian, and performances by New York’s Metropolitan Opera, according to the lawsuit.

According to court documents, Westwood learned of the networks’ existence after it acquired Mutual. Westwood said it would have paid less for Mutual had it known about the rival networks.

On April 16, Superior Court Judge John L. Cole issued a preliminary injunction preventing Amway’s networks, which were operated by the company’s MultiComm Telecommunications subsidiary, from entering into any new distribution agreements and barring Amway from using the word Mutual in connection with its business.